Published: Monday, September 7, 2009 at 1:00 a.m - Sarasota Herald Tribune

Merrill Lynch has become the latest brokerage house to settle accusations that it misled investors over auction rate securities.

Merrill Lynch will pay $8.5 million to Florida regulators to settle an investigation into its sales practices of those securities.

The state Office of Financial Regulation reached the final settlement last week over allegations that Merrill Lynch financial advisers misled investors about the safety of the auction rate securities market.
The $8.5 million is Florida's share of a $125 million national settlement reached with the broker and the North American Securities Administrators Association.

A number of brokerage houses have run into trouble over their marketing of auction rate securities.

Some firms touted them to investors as safe, cash-like investments. But when the market for those securities crashed in early 2008, investors were stuck with illiquid investments.

Last month Banc of America Securities LLC and Banc of America Investment Services Inc. agreed to pay a $4.8 million fine in Florida to settle findings about misleading sales practices.
The state had earlier come to agreements involving auction rate securities with Citigroup Global Markets, Wachovia Securities/Wachovia Capital Markets and JPMorgan Chase & Co.

Merrill Lynch is now owned by Bank of America.